Crisis as Shirking: An Agency Theory Explanation of the Souring of American Civil-Military Relations

The alleged crisis in American civil-military relations is best explained by grounding it in a general theory rather than in an ad hoc exegesis of recent events. This article introduces the agency model, a simple game-theoretic understanding of civil-military relations. According to agency theory, the current friction in American civil-military relations reflects the conflict associated with intrusive monitoring by civilians coupled with military shirking. Such a concurrence is one of the predicted outcomes of the agency model and, consistent with the model, there are demonstrably strong values on several of the parameters the model identifies as important in producing this monitoring/shirking outcome. The model suggests that post-Cold War developments have had a profound effect in reducing the perceived costs of monitoring, reducing the perceived expectation of punishment, and increasing the gap between what civilians ask the military to do and what the military would prefer to do.